NEW YORK, May 21, 2026 — Intuit Inc. shares dropped sharply in after-hours trading Wednesday, as the company slashed its fiscal 2026 revenue forecast for its flagship TurboTax product and revealed plans to cut approximately 17% of its full-time workforce, affecting around 3,000 employees globally.
The stock closed the regular session at $383.93, down nearly 4%, before plummeting to $332.48 in extended trading — a further decline of 13.4%. The sharp move underscores investor anxiety about the tax preparation giant's core business, even as overall quarterly results exceeded expectations.
Earnings Beat Overshadowed by TurboTax Concerns
Intuit reported fiscal third-quarter revenue of $8.56 billion, up 10% year-over-year, and non-GAAP earnings per share of $12.80, topping analyst estimates. The company also raised its full-year revenue guidance to a range of $21.341 billion to $21.374 billion, with adjusted EPS expected between $23.80 and $23.85.
However, the positive headlines were overshadowed by a downward revision to TurboTax's fiscal 2026 revenue outlook, which investors interpreted as a sign of weakness in the company's most recognizable consumer product. During the earnings call, Morgan Stanley analyst Keith Weiss noted that market participants were focused on the "tax results and the disappointment there."
CEO Cites Pricing Issues, Not AI
Intuit CEO Sasan Goodarzi pushed back against the notion that artificial intelligence was eroding demand for paid tax preparation. "None of this has anything to do with AI," Goodarzi said on the call. He attributed the forecast cut to challenges in setting the right price for lower-income, price-sensitive filers, a segment that has become increasingly important as free and low-cost alternatives proliferate.
The company is also closing its offices in Reno, Nevada, and Woodland Hills, California. U.S. employees affected by the layoffs are expected to depart by July 31, according to an internal memo cited by Reuters.
Competitive Pressure Intensifies
Intuit faces mounting competition from rivals like H&R Block, which has been actively marketing its AI Tax Assist tool for the 2026 tax season. The battle is no longer just about user numbers, but about which company can deliver faster, cheaper, and more reliable tax help. Intuit's own push into AI comes with risks, including potential project delays, third-party vendor issues, and shifting regulatory landscapes, as noted in the company's quarterly filing.
Despite the broader market rally — the Nasdaq Composite rose 1.5%, the S&P 500 gained 1.1%, and the Dow Jones added 1.3% on Wednesday — Intuit's stock moved in the opposite direction, highlighting the company-specific concerns.
Investor Focus Shifts to Execution
Investors are now watching two key areas: whether the raised full-year guidance masks deeper issues in the tax business, and whether the workforce reduction will make Intuit more agile or simply smaller. The layoffs are part of a broader restructuring aimed at streamlining operations and reallocating resources toward growth areas, but the near-term uncertainty has weighed heavily on sentiment.
With TurboTax still Intuit's most prominent consumer brand, any sign of weakness there reverberates across the entire company. The coming quarters will be critical in determining whether the pricing and AI strategy can restore confidence or if further adjustments are needed.
